Mortgage Calculator

Calculate your monthly mortgage payment with taxes, insurance, and PMI included. Free, instant, and accurate.

How to Calculate Your Mortgage Payment

Understanding your mortgage payment is the first step in homebuying. Our free mortgage calculator helps you estimate your monthly housing costs including principal, interest, property taxes, insurance, and PMI.

The Mortgage Payment Formula

The core mortgage payment formula is: M = P[r(1+r)^n] / [(1+r)^n - 1]

What's Included in a Mortgage Payment (PITI)

Your total monthly housing payment typically includes PITI: Principal, Interest, Taxes, and Insurance. If your down payment is less than 20%, you'll also pay Private Mortgage Insurance (PMI).

Tips to Lower Your Mortgage Payment

  1. Increase your down payment — At least 20% eliminates PMI
  2. Improve your credit score — Higher scores qualify for lower rates
  3. Choose a longer loan term — 30-year vs 15-year reduces monthly payments
  4. Shop around for rates — Compare at least 3 lenders
  5. Buy discount points — Pay upfront to reduce your rate

FAQ

How much mortgage can I afford?
A common rule is the 28/36 rule: your monthly mortgage payment shouldn't exceed 28% of your gross monthly income, and total debt payments shouldn't exceed 36%. Use our calculator to model different scenarios.
What is PMI and when can I remove it?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. You can request removal once your loan-to-value ratio reaches 80%, and it's automatically removed at 78%.
What's the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR includes the interest rate plus other fees (origination, discount points), giving you the true cost of the loan.
Should I get a 15-year or 30-year mortgage?
A 15-year mortgage has higher monthly payments but significantly less total interest. A 30-year mortgage offers lower payments and more flexibility. Use the calculator to compare both.
How accurate is this mortgage calculator?
Our calculator uses the standard amortization formula and is highly accurate for estimation. Actual payments may vary based on your lender's specific fees and your exact closing date.
What is PMI and when can I remove it?
PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home's value. It typically costs 0.3–1.5% of the loan amount annually. By law, PMI is automatically removed when your loan balance reaches 78% of the original home value. You can also request removal earlier (at 80%) if your home has appreciated or you've made extra payments.
How much down payment do I need?
Conventional loans require a minimum of 3–5% down. FHA loans require 3.5%. VA and USDA loans can require 0% down. However, putting less than 20% down means you'll pay PMI, increasing your monthly cost. A larger down payment also means a smaller loan, lower monthly payments, and less total interest over the life of the loan.
Is a 15-year or 30-year mortgage better?
A 15-year mortgage has higher monthly payments but significantly less total interest — often saving $100,000+ over the life of the loan on a typical home. It also typically has a lower interest rate. A 30-year mortgage offers lower payments and more flexibility. Many advisors recommend 30-year with extra payments: you get the lower required payment but can pay it off faster if desired.
What closing costs should I expect?
Closing costs typically run 2–5% of the loan amount (roughly $3,000–$10,000+ on a $300,000 home). They include lender fees (origination, underwriting), title insurance, appraisal, inspection, recording fees, and prepaid items (property taxes, homeowners insurance, and initial escrow). Some lenders offer 'no closing cost' mortgages but compensate with a higher interest rate.

How to Use the Mortgage Calculator

  1. Enter the home price — the total purchase price of the property.
  2. Set your down payment — enter the amount or percentage. A 20% down payment avoids PMI (private mortgage insurance).
  3. Enter the interest rate — use the annual percentage rate (APR) from your lender's quote.
  4. Choose the loan term — most mortgages are 15 or 30 years. Shorter terms have higher payments but less total interest.
  5. Add property taxes, insurance, PMI, and HOA if desired — these create a complete monthly payment picture including escrow.

Understanding Mortgage Payments and Costs

A mortgage payment typically consists of four components, often abbreviated PITI: Principal, Interest, Taxes, and Insurance. The principal and interest form the core loan payment, calculated using the standard amortization formula. Property taxes vary widely by location — from 0.28% of home value in Hawaii to over 2.2% in New Jersey. Homeowners insurance averages $1,000–$2,500 annually depending on location and coverage. If your down payment is below 20%, lenders require PMI (private mortgage insurance), typically 0.3–1.5% of the loan amount annually, which protects the lender (not you) against default.

The amortization schedule reveals how payments are split between principal and interest over time. In the early years of a 30-year mortgage, the vast majority of each payment goes toward interest. For a $300,000 loan at 6.5%, the first monthly payment of $1,896 sends only $271 to principal and $1,625 to interest. By year 15, the split is roughly 50/50, and by the final years, nearly the entire payment goes to principal. This is why making extra principal payments early in the loan has an outsized impact on total interest paid and loan term.

When deciding between a 15-year and 30-year mortgage, consider the trade-offs. A 15-year loan typically offers a rate 0.5–0.75% lower than a 30-year and builds equity much faster, but the monthly payment is significantly higher — often 40–50% more. Many financial advisors recommend a 30-year mortgage for the flexibility: you can always make extra payments to simulate a shorter term, but you're not locked into the higher payment if financial circumstances change. Factor in closing costs (2–5% of the loan amount), potential refinancing opportunities, and the mortgage interest tax deduction when evaluating total costs.

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